If pollution causes more illness and medicine sales increase, what difference may appear between GDP and welfare?
Answer and explanation
Correct answer: GDP may rise while health welfare falls
The governing concept is that GDP counts market production, not whether that production arose from beneficial or harmful conditions. More illness can increase paid medical sales and therefore measured output, while pollution and poor health reduce comfort, productivity and quality of life. Thus option C is correct. Treatment expenditure may respond to harm; it does not automatically represent a net welfare gain.
Frequently asked questions
What is the correct answer to this question?
GDP may rise while health welfare falls
Why is this the correct answer?
The governing concept is that GDP counts market production, not whether that production arose from beneficial or harmful conditions. More illness can increase paid medical sales and therefore measured output, while pollution and poor health reduce comfort, productivity and quality of life. Thus option C is correct. Treatment expenditure may respond to harm; it does not automatically represent a net welfare gain.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
